Larry Kudlow emphasizes that in the us economy “there are many positive things”
Economic adviser to the White house Larry Kudlow said Sunday that, in his opinion, economic growth of 4.1 percent recorded in the United States in the second quarter will be sustained in the coming months, despite the skepticism of independent economists.
“There are many positive things,” said Kudlow, speaking on CNN.
According to him, President Donald trump “deserves to be honored as the winner of the” given “tax cuts and reduced regulations, for example.”
“Trade reform, I think it pays off. The fundamentals of the economy look very good,” he said.
“There is a boom of business investment. This gives rise to the performance. It generates jobs. This raises wages for ordinary people, which is very important,” he explained.
Kudlow, said that for five full calendar quarters that occurred in the 18-month presidency trump, an average economic growth of the world’s largest economy was 2.9 percent.
“I see no reason why that can’t continue for another few quarters,” said the adviser.
After Friday, it was announced that the growth rate in the second quarter was 4.1 percent, trump said that the country is on the way to the highest annual GDP growth in 13 years. The President predicted that as the conclusion of new trade agreements with other countries the us economy will exceed the data for the second quarter.
“It’s very, very stable numbers, he said. Is not a single success.”
On Sunday, trump wrote on Twitter: “The biggest and the best conclusion to be drawn from the good report on GDP is that quarterly trade deficit declined by $ 52 billion, and, of course, historically low unemployment rates, especially among African Americans, Hispanics, Asians and women.”
Some independent economists, however, doubt that the American economy, with an annual volume of 18.6 trillion dollars can continue to grow at the same pace as in the last three months.
Some experts say that the success of the last months, mainly, although not entirely, are the result of temporary factors, for example, the initial rally after the tax cuts, supported by trump, which came into force earlier this year. Most analysts agree that in 2018 the U.S. economy may grow 3 percent, which is the best figure since 2005, when it was 3.5 percent. However, they do not think that compared to the second quarter to 4.1 percent will be recorded again.
“We believe the second quarter will be the peak of growth, given that the boom caused by tax cuts, fades, the pace of global economic growth becomes more moderate, the fed tightens monetary policy, and the economy hangs trade protectionism,” says Gregory Daco, chief economist at the U.S. research company Oxford Economics.
The chief economist of Moody’s Analytics mark Zandi says: “the Second quarter showed good results, but they are fueled by tax cuts and increased government spending”.
In the US, consumer spending accounts for about 70 percent of the economy, Ian Shepherdson, chief economist at the consulting firm Pantheon Macroeconomics, believes that these costs explain a good performance of the second quarter.
“Consumers were really in the zone, he said. – Growth of 4 percent, probably speaks to the fact that people spent money raised from the tax cuts, which they felt in January, but this is unlikely to happen again.”